Google CEO offers news biz advice

The chief executive of Google has a message for the staggering newspaper industry: Things will get better.

And Google CEO Eric Schmidt told a group of newspaper executives Sunday evening that his growing company will be an integral part of those changes.

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Newspapers will make money once again, he said, but it will be from online advertisements and an altered subscription model. Schmidt said his firm is working on new ways to tailor advertisements and content for consumers, based on what stories they read.

"We have a business model problem, we don’t have a news problem," Schmidt said.

Speaking to the American Society of News Editors’ annual convention at the J.W. Marriott in downtown Washington, Schmidt showered praise on the industry, calling journalism an “art.” Schmidt said he reads three newspapers, and called their work indispensible. And he blasted blogs, saying that any questions about the value of newspaper editors can be answered: "Look at the blog world."

"High quality journalism will triumph," he said.

But along with that praise came his advice about how the business should change: Organizations should refocus their attention on personalizing content and disseminating news through mobile devices – businesses in which Google is heavily involved.

Schmidt told the mostly full ballroom that “new forms of making money will develop,” and that Google is working on those forms. But he declined to divulge many details about that work.

“The web can ultimately be very good for news,” Schmidt said. “Think about it: You have more readers than ever, you have more sources than ever, for sure you have more ways to report and new forms of money. New forms of making money will develop.”

Schmidt, who hovered at the side of the lectern throughout his 25-minute speech, was firm that there is a robust future for both display advertisements and subscriptions — revenue streams that have shrunk as dramatically as the volume of free content online has expanded.

Google, of course, has a stake in that free content. It aggregates news through its search engine, directs users to sites with free content and has made the universe of free information much more accessible, even as the company has profited by displaying its own advertisements beside that information.

Much of Schmidt’s advice seemed to point to changes that might emerge from forms of technology that Google is developing, has developed or could foreseeably develop. Some of those advances in technology, he said, could create new revenue streams for news organizations.